Cuba braces for economic collapse as US blocks Venezuelan oil supplies

US President Donald Trump has warned Cuba it will no longer receive oil supplies or financial support from Venezuela, calling on the island's government to negotiate terms with Washington in the aftermath of last week's operation that resulted in Nicolás Maduro's capture.

Writing on Truth Social on January 11, Trump stated no oil or money would reach Cuba from its South American ally, providing no specifics about what kind of agreement he sought or its intended purpose.

Cuban President Miguel Díaz-Canel responded swiftly, rejecting any external interference in his country's affairs and pledging the nation stood prepared to defend itself completely. "Cuba is a free, independent and sovereign nation. No one tells us what to do," Díaz-Canel wrote on X.

The exchange follows the January 3 US commando operation in Caracas that resulted in Maduro's detention alongside his wife. According to Havana's government, 32 Cuban nationals died during the raid, individuals whom Washington claims provided protection services to the Venezuelan leadership.

Trump's threats come as Cuba's communist system shows mounting signs of strain amid deepening economic hardship and crumbling infrastructure. The island has experienced severe food shortages, with an estimated 1.4mn people failing to meet daily caloric requirements in 2023, whilst extreme poverty affected 88% of the population by 2024. Growing numbers of Havana residents have been forced to scavenge through rubbish bins for sustenance as the government's socialist safety net has collapsed.

Trump asserted that Cuba had depended on substantial petroleum deliveries and monetary transfers from Venezuela over many years, receiving these benefits in return for supplying security personnel to Maduro and former president Hugo Chávez. He stated most of these Cuban operatives were killed in the recent American assault.

Foreign Minister Bruno Rodríguez, however, disputed the allegations, insisting Cuba has never accepted payment or material compensation for providing security assistance to foreign governments. He maintained his country possesses full authority to acquire fuel from any exporter willing to conduct business, rejecting Washington's economic restrictions as legitimate constraints on such commerce.

On January 12, Díaz-Canel clarified that bilateral discussions with Washington were limited to technical migration coordination, contradicting Trump's implications about broader negotiations. The Cuban leader specified that meaningful engagement would require "adherence to sovereign equality, reciprocal respect, international legal principles, mutual advantage, non-interference in domestic matters and complete recognition of Cuban independence.”

Trump last week stated Cuba appeared on the verge of collapse, pointing out that the island had depended entirely on Venezuelan petroleum for its income and would struggle without this resource.

Indeed, Cuba faces severe economic difficulties, compounded by long-standing US sanctions and what was an already dwindling supply of subsidised Venezuelan crude oil. The island uses this fuel to operate diesel generators that support an unstable electrical system experiencing regular power failures. The country's power infrastructure has suffered from years of underinvestment and is "literally crumbling", according to Philip Paterson, senior analyst for Latin America at Oxford Analytica, causing frequent nationwide blackouts.

The oil arrangement between ideologically aligned Havana and Caracas dates back to 2000, when Chávez established the subsidised supply agreement. This Venezuelan backing offered a crucial lifeline after the Soviet Union's collapse ended Moscow's economic support to Cuba. However, as Venezuela's own crisis worsened, this aid has largely dried up.

"China is willing to deal with Cuba, but it's not ideologically committed to supporting it the way the Soviet Union or Venezuela were, and it's not keen to deal with charity cases," Paterson said last July during an Oxford Analytica webinar.

American crippling economic sanctions against Cuba have remained in force for over six decades. Washington's reclassification of Cuba as a "state sponsor of terrorism" under Trump's first term has made travel to the United States more difficult for anyone who has visited the island, and placed additional restrictions on companies seeking to do business there. As a result, many tour operators have stopped operating in Cuba, cutting off a critical source of foreign currency.

On January 11, Trump shared a social media post suggesting Marco Rubio might assume leadership of Cuba, voicing his approval of the idea. Rubio, whose parents emigrated from Cuba, currently holds the secretary of state position whilst serving simultaneously as national security adviser and previously heading the US Agency for International Development.

According to analysts, Rubio views Venezuelan regime change as a stepping stone to his ultimate objective of ending communist rule in Cuba. He has long argued that toppling Maduro's government would deal a fatal blow to the communist-run island by undermining Havana's principal supporter.

Another key factor differentiating the current period from earlier crises is leadership. Díaz-Canel, who belongs to the post-revolution generation, does not command the same credibility as the Castro brothers, even if he remains committed to the ideology of the revolution, according to Paterson.

"Expectations of government collapse are writ large now," Paterson said, pointing to reduced external assistance, increasing external pressure, and a leadership that lacks the historic legitimacy of its predecessors.

Maduro's abduction, framed by the White House as law enforcement activity to prosecute the authoritarian leader on narcoterrorism charges, generated widespread international criticism over what critics described as a blatant violation of international law.

The latest warnings to Cuba form part of Trump's broader regional strategy, which he branded the "Donroe Doctrine" in reference to nineteenth-century American foreign policy asserting hemispheric influence. Following the Venezuela operation, Trump has directed threatening statements towards Colombia, Mexico, Iran and Greenland.